In questions i and 2. the lender faces a single borrower who has a choice between two activities. In question I. the lender offers limited liability loans under .SJ'HH'JJE'II'R' information. In question 2. the lender offers limited liability loans under (tsgt'mtttatric information. The following assumptions describe the borrower and lender throughout questions 1 and 2. Borrower: Bernie is an entrepreneur from Geneva.Switzerland. H e must decide between two investment projects. Both projects are risky and require an investment of 5500. He does not have any money. so he needs a loan in order to undertake one of the projects. He will take a loan as long as he can earn an expected income of at least zero. The two projects have the following characteristics: . Project 1 consists of opening Bernie's Best Beretta, a clothing store that provides top of the line berets [a kind of bat} for fashion-conscious clients. Since Bernie has a deep understanding of European fashion and is an expert in marketing. this project is relatively safe: with 85% probability it will succeed and generate revenue of $1.400. and with 15% probability it will fail and generate only revenue of $550. . Project 2 consists of opening Bernie's Ben: Best Bern! Farm. which grows organic blueberries and blackberries in the beautiful Rhone Valley. Climate change has increased the frequency of severe drought in Switzerland. so this project implies signicant risk. Specically. with 20% probability. rainfall will be normal so that the harvest will succeed and generate revenues of $3.500. and with 80% probability there will be severe drought so that the harvest will fail and generate revenues of only $250. Lender: Adelaida is Bernie's rich friend who may offer him a loan. If Adelaida offers Bernie the loan. she would have to withdraw $500 from her savings account. where she is currently earning a 10% interest rate. According to local regulations. loans in Switzerland are limited liability and work as follows. If Bernie's project succeeds. he must repay 100% of the total debt obligation (principal plus interest): however. if his project fails. he only has to repay 50% of the total debt obligation. For example. if the interest rate is 30%. Bemie would have to repay 0.50*(l+0.3)*500 if his project fails. a. Derive expressions for E(y1) and E(y2), the expected value of Bernie's income under the two projects. For each expression, report both the "Setup" equation (as discussed in section) and your final equation. Report your final equations in intercept-slope form. For example, for project 1, report E(v1) = A - Bi, where A and B are numbers that you calculate